Why the Whistle Didn’t Blow

ByTRACY WOOD |August 3, 2010

Tuesday, August 3, 2010 | The law firm that represented Bell when council members in that city granted themselves six-figure salaries and allowed the city manager’s pay to be set near $800,000, also represents the Orange County cities of Yorba Linda, Aliso Viejo and Lake Forest.

Yorba Linda was considering switching law firms even before the Bell scandal broke, and Mayor John Anderson is mum on whether that will play a role in the city’s decision.

Officials in Aliso Viejo and Lake Forest said there were no plans to change law firms.

Yet the Bell situation raises a question that resonates in every California city. What is the ethical role — or lack of ethical role — of the city attorney?

It’s unclear in the Bell case whether any laws were violated by either a city election that allowed officials to increase the salary of the city manager and others or the actual increases. Numerous law enforcement agencies now are combing the city’s records to sort out exactly what happened and who was responsible.

As odd as it may sound, legal ethics may have kept the Bell city attorney, Edward Lee, a managing partner with Best Best & Krieger, from sounding the alarm, legal experts say.

Within the past 10 years, California lawmakers have tried twice to enact statutes offering lawyers an ethical way to protect the public from corrupt or disreputable government officials on the city as well as state level, but both times those efforts were vetoed, first by Gov. Gray Davis and then by Gov. Arnold Schwarzenegger.

(In yet another twist, the firm anounced Monday that Lee is leaving BB & K to “focus his efforts on assisting the city of Bell through this crisis.”)

Lee said: “I am confident that my reputation will be restored in time, as events unfold.”

The Los Angeles Times reported last week that the city of Downey dropped Lee as its city attorney.

The ‘Noisy Withdrawal’ Option

Most states — but not California — offer lawyers a way out of serious ethical dilemmas, said Diane Karpman, an expert on legal ethics who writes a column on ethics for the California Bar Association’s journal.

It’s called a “noisy withdrawal,” a way of resigning from a job and ethically turning to the proper authorities with information about illegal actions.

Without such a provision, she said, unless someone’s life is in danger, about the only thing a California lawyer can do is quit.

If a lawyer does quit because a job is ethically untenable, Karpman said there is a code phrase such lawyers use to signal “something questionable is going on.” The code, she said, is for the lawyer to say he wants “to spend time with his family.”

To openly blow the whistle in California means facing possible discipline by the state bar.

Karpman pointed to the 2000 case of Cindy Ossias, a former legal counsel to then California Insurance Commissioner Charles Quackenbush, who also was an up-and-coming Republican candidate for governor.

In the aftermath of the 1994 Northridge earthquake, Ossias discovered that instead of paying massive damage claims, large insurance companies were being required by Quackenbush to contribute to foundations he created. She reported her findings to the state Assembly Insurance Committee and testified publicly about the wrongdoing.

Quackenbush resigned from office, but no criminal action was taken against him. Ossias, according to Karpman, underwent a lengthy investigation by the state bar to determine if she had violated ethics standards by disclosing the insurance problems, but ultimately she wasn’t disciplined.

Karpman said the Quackenbush case demonstrates the ethical bind California lawyers face when confronted with questionable actions by government officials. She said overall Best Best & Krieger has a good reputation as a law firm but may have been unable to go outside the city with any concerns about what was happening in Bell because of California’s tight ethics rules.

Many other states, however, follow American Bar Association ethical guidelines, which, Karpman said, permit a “noisy withdrawal” when a lawyer suspects wrongdoing and quits working for a client.

Karpman said the California Bar Association is in the process of reviewing and updating its rules of professional conduct, but it’s not known if the association will include a “noisy withdrawal” provision.

Who Protects the Public?

UC Davis law professor Rex R. Perschbacher, who wrote a book on California legal ethics, said in the Los Angeles Times story, “The city attorney’s responsibilities are to the people of the city, as represented by the City Council. There is always a conflict. ‘Am I doing the right thing by the people,’ or ‘am I doing what the City Council wants’. … It puts the city attorney in a real tough bind.”

In the end, he said the only real choice that city attorneys have is to resign if city councils persist in conduct that the attorney has warned them is wrong.

So, who protects the public?

“In a representative democracy,” said Rex Heinke, one of California’s most prominent First Amendment lawyers who also has been very active with the bar association, “the public has to scrutinize the acts of the people it elects to represent them.”